In Australia, a telecommunications Goliath (named Telstra) reigns. He uses his iron fist to protect his territory and suppress invading technologies, so that he can exploit the last drop of profit out of his massive ageing POTS (Plain Old Telephone System) belly.
Goliath beware, David might be slipping through the net. By March 2004, ordinary citizens will be able to walk into Dick Smith or Harvey Norman and buy a device, which can completely replace POTS, for an outlay of around $200-$300.
The advent of ADSL technology gave POTS new life. The old copper wire could be used to deliver broadband Internet (together with all its bright new multimedia services) in parallel with voice services. Goliath made that his own. Goliath has even prepared himself to digest Voice over IP technology (which reduces the cost of telephone calls to next-to-nothing), by raising the cost of line rentals around Australia.
A small start-up company called Unwired, that knows the weaknesses in Goliath’s defences (Unwired is led by Peter Shore, former Telstra executive and one time rival for Dr Switkowski’s top job at Telstra) has a plan to transform Australia into a single WiFi hotspot. Unwired has just launched itself onto the ASX, and is gaining market acceptance and public equity investment that will finance the transformation of its business plan into a reality.
On November 13th, Unwired struck a deal with a shelved ASX listed company named Breathe Group Ltd. In the next few weeks, Unwired will take over Breathe Group Ltd, change its name to Unwired Group Ltd, and use the new vehicle to raise $100 million in capital, sufficient finance to build and market an FWA network that will cover the whole Sydney basin by March 2004. Unwired claimed to have $90 million in commitments from institutional investors at the time it struck the deal.
The network will cost a meagre $32.7 million to build, but will deliver 95% in-building coverage to the Sydney area. That means, it will work inside most buildings, and be able to reach the 30% of households that are outside the range of Telstra ADSL. The technology works with non line-of-site base stations, so a mere 70 base stations will provide coverage to Sydney.
To get connected, a customer needs only a modem with two short antennae (called a Rabbit), a free USB or ethernet port, and some simple instructions. It works with standard operating system, so no additional software is required for PCs or Macs. It delivers broadband Internet at up to 1Mb/s, which is twice the speed of Telstra’s residential ADSL and the same as Optus’ HFC cable. It is independent of any cables, so ‘Rabbit’ can operate and relocate anywhere in the coverage area without notifying the network.
When VoIP technology gains market acceptance (not long now, surely), David will be able to carry all telephone calls, and what role will remain for Goliath. May he RIP!
Will David take over Goliath’s dominion in Australia? Unwired aims to be the second national local loop provider after Telstra. In 2000 and 2001, Unwired spent $109 million in acquiring 3.4GHz spectrum licences to cover the whole of eastern and southern Australia and including Sydney, Melbourne, Brisbane, Adelaide and Perth, which covers 95% of the population. These licences position Unwired to become the second national ‘first-mile’ provider after Telstra.
Unwired has a test FWA-network operating in the Sydney suburbs of Balmain, Pyrmont, Waverton and Wollstonecraft. Customers, who agree to participate in Unwired’s market research, receive the loan of a Rabbit wireless modem and up to 1,000Mb of data download per month, free-of-charge.
For further information, see also:
Unwired Australia Pty Ltd
Breathe Group (archived)
Australia – Wireless Broadband – Overview and Analyses
Australia – Wireless Broadband Projects
Australia – Wireless Communications
Australia – Broadband – Broadband Economy
Australia – New Telcos – Market Analysis 2003
Australia – Broadband – HFC Networks
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